Chance of convictionThursday, Feb. 5: 38 percentBased on Douglas Faneuil's survival of another day of cross-examination, Martha Stewart's chances of conviction rise from 28 percent to 38 percent.

David Apfel, Peter Bacanovic's attorney, whose gratuitously rude cross-examination of Douglas Faneuil made the courtroom root for Faneuil on Wednesday, rolled out a kinder, gentler version of himself on Thursday. As he resumed the cross-examination, Apfel was less strident and occasionally even polite. Seven hours later, when the session adjourned, Faneuil still won, but this time Apfel's relentless, grinding, and (somewhat) civil attack did, eventually, score some points. It also established thousands of facts, any one of which Faneuil might trip over later.

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Apfel began by resuming the prior day's themes: Faneuil has motives to lie, and his "story" has "evolved" so much over the last two years that he is either lying or unreliable. According to Apfel, Faneuil's motives include his future sentencing hearing; his misdemeanor wrist-slap for serving up his boss and Martha Stewart; his grudge against Stewart for treating him like a pack animal; and his desire to avoid prosecution on drug charges. That these motives exist is probable. That they exist, however, doesn't mean that Faneuil acted on them (just as Stewart and Bacanovic may not have acted on the motives that the government trumpets as evidence of their alleged crimes).

Apfel first reminded the jury that no one had ever explicitly asked Faneuil to lie. As on Wednesday, however, Faneuil undermined this effort by asserting that the message was communicated implicitly.

Q: Peter Bacanovic never specifically told you what to say and what not to say, did he?

A: I would not agree with that.

Q: He didn't tell you to lie?

A: Not explicitly.

Q: When you spoke to the SEC in January, Peter Bacanovic did not say, 'This is what you should say.'

A: Right.

Q: But your testimony is that he somehow intimidated you.

A: I understood what Peter was telling me. [Note: italicized testimony is paraphrased].

Apfel then attacked the apparent (to him) contradiction of Faneuil's claiming to be intimidated by his boss while still joking around with him. In January, 2002, Apfel said, When you were supposedly intimidated by Peter Bacanovic, did you ever send e-mails with funny articles attached? Yes, said Faneuil. Do you remember sending him an article about a man having sex with a goat? The latter comment triggered an instantaneous objection from Karen Patton Seymour and a squawk of outrage from Judge Cedarbaum, who looked as if she might clamber over the bench and attack Apfel with a gavel. When the snickers in the gallery ceased, Judge Cedarbaum reminded the jury that questions are not evidence—only answers are evidence. Apfel rephrased, and Faneuil explained the contradiction as emblematic of a "schizophrenic office environment," in which the events of Dec. 27, 2001 were "compartmentalized."

Faneuil holds up under Apfel's hammering

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Apfel then hammered away at Faneuil's view that the gifts he received from Peter Bacanovic were "consideration for not informing" (the wording in his plea agreement) but that the similar gifts from Merrill administrator Judy Monaghan weren't. Judy Monaghan didn't know the truth about Dec. 27, Faneuil said. When Apfel argued that Faneuil's testimony about why he lied ("I was afraid") contradicted his plea agreement (money and other bribes), Faneuil reiterated that he hadn't lied for the money. Apfel pounced on this—contradiction!—but Faneuil explained that he had signed off on the agreement's language because he regarded the airline tickets and vacation as rewards, not bribes, and had looked up "consideration" in the dictionary and found that, in a legal sense, it meant "reward or other recompense." Later, with Apfel railing that Faneuil's March raise had nothing to do with his lies, Faneuil agreed (an ostensibly helpful point for the defense—the timing of the raise looked suspicious). He added, however, that "I felt I would be fired if I didn't keep silent." One of the truths that the cross examination elicited, in other words—a truth that is not helpful to the defense—is that Faneuil's stated motive for his "failure to inform" is more plausible than the motives in the plea agreement (airline tickets and vacation days).

After lunch, Apfel opened a new line: The reason Faneuil "came forward" in June was that the Feds were closing in. The Martha Stewart ImClone news had leaked, Sam Waksal had been arrested, and Congress was requesting Peter Bacanovic's testimony, So you knew that the best chance of working out a deal for yourself was to hand over Peter Bacanovic and Martha Stewart.And that deal involved cooperating with the government against Peter Bacanovic and Martha Stewart—right? Faneuil's answer articulated a theme that has subliminally permeated his testimony from the beginning (and made it more credible). "I never thought my cooperation was against anyone," he said. "My cooperation was to tell the truth."

Next came the e-mails: Faneuil bitching to friends about Stewart's phone manner.

"I have never, ever been treated more rudely by a stranger on the telephone. She actually hung up on me." "Martha yelled at me again today, but I snapped in her face, and she actually backed off. Baby put Ms. Martha in her place!!!" Apfel used these e-mails to suggest, as Richard Strassberg had in his opening argument, that Faneuil was "fixated" on Martha Stewart. The e-mails didn't make him sound "fixated," though. They made him sound unprofessional (Faneuil isn't the first of the online generation to learn that e-mail is as convenient and dangerous as crack). They also made him sound like he was blowing off steam.

Finally, late in the afternoon, Apfel recaptured some ground. After a full day of "cross," Faneuil hadn't been so much as scratched, but hours of fending off a lawyer as smart as Apfel eventually goes to one's head. Gradually, Faneuil lost his humble underdog demeanor and, at times, appeared almost smug. The late afternoon is one of the most dangerous times for a witness: The combination of exhaustion and overconfidence breeds complacency, and, in the hand-to-hand combat that is cross examination, complacency can be fatal.

For the last hour of the day, Apfel returned to comparing Faneuil's prior statements with his current testimony. Apfel was relentless (more than a dozen times, the judge ordered him to stop repeating himself and "move on"), and eventually Faneuil let his impatience show. Testifying is like playing defense in sudden-death overtime—if the attacker scores, you lose—so one slip would have been the end of him. The tension increased when Faneuil occasionally abandoned his earlier practice of qualifying answers with "As I recall … ," "I believe that … ," "I don't remember using those words exactly … ," etc., and, instead, made a few reckless absolute assertions. As Apfel suggested, some of these might have constituted minor discrepancies with prior assertions ("might" because the discrepancies were so minor that one was never sure whether the statements were different or the notes of earlier statements were wrong). One of Apfel's biggest scores came when, for the umpteenth time, he asked Faneuil to admit that his story had evolved, and Faneuil conceded that "My recollections have changed a bit." Amazingly, however, Faneuil escaped disaster.

If Apfel successfully demonstrated that Faneuil's memory is human, however, he failed to demonstrate that Faneuil was lying. Faneuil isn't out of the woods yet, of course: On Monday, moreover, he will have to face Bob Morvillo—a Bob Morvillo who has no doubt learned from David Apfel's experience. Bob Morvillo, furthermore, may take up two lines of attack that Apfel ignored. The first, which might be called "The Fantasy Life of Douglas Faneuil," would argue that Faneuil simply misperceived what Bacanovic was telling him and then, as the tension increased, developed an ever-more-fantastic conspiracy-theory view of his world. The second would be that Faneuil's "grudge" is not against Stewart but Bacanovic (the bad blood here has, at times, seemed more intense than might be expected, at least from Faneuil's side). If Morvillo doesn't find a weakness that Apfel missed, though, Faneuil's performance may force Peter Bacanovic to testify in his own defense.

Henry Blodget is the founder, editor, and CEO of Business Insider. Follow him on Twitter.